Rural round-up

September 29, 2014

Te Puni Kōkiri Chief Executive Hails Growing Success Of Māori Agribusiness at Ahuwhenua competition launch – 2014 FOMA Conference:

Speaking at the official launch of the 2015 BNZ Māori in Farming Award – Sheep & Beef (Ahuwhenua Trophy) at the FoMA Conference in Whanganui this evening, Te Puni Kōkiri chief executive Michelle Hippolite said: “The Ahuwhenua Trophy Competition remains a preeminent showcase for excellence, achievement, and for growing Māori innovation for economic prosperity.”
Looking around the room, Michelle said that those at the conference showed the depth and calibre of talent at the helm of large Māori farming enterprises around the country.

“Over the years, most of these Māori farm enterprises had featured as entrants and finalists in the Ahuwhenua Trophy Competition,” she said. “Today the competition could be credited with driving continued improvements occurring in Māori agribusiness, and which were now pushing it to the forefront of the sector.” . . .

Second hand TradeMe buys boosts farm change – Jill Galloway & Sandra Crosbie:

Ryley Short says that when the Fonterra tanker first came to collect milk at her Mt Stewart farm there were 10 people there cheering. They were all involved in converting the farm to dairy, wanting to see it succeed.

“The tanker driver was a bit surprised,” Ryley says. “He asked if this was the first milk picked up. It was. It had been a sheep and beef farm before the conversion.”

The switch by Ryley Short and her husband Mike to dairying is a conversion with a difference. They have relied a great deal on Trade Me for secondhand equipment, which they often get cheaply. Even the dairy shed came through the online auction website. . .

Production at demo farm reaches record level  -

Daily milksolids (MS) production for each cow on the Waimate West Demonstration Farm near Manaia in Taranaki is at its highest ever.

The daily per cow MS production has reached two kilograms in the third and final season of a trial that’s investigating the viability of integrating cropping on the dairy platform.

Twenty-five per cent of the farm is being planted in crops for the trial.

At last week’s spring field day on the farm, DairyNZ scientist Kevin Macdonald produced figures showing daily milksolids per cow to mid-September was almost half a kilogram higher than last year’s figure of 1.56kg. . . .

National’s Freshwater Fund may spur on-farm wetlands:

 Having worked with DairyNZ to analyse the $100m freshwater fund policy, recently announced by the National Party, Federated Farmers believes it could vastly improve water quality outcomes.

“The Fund to retire farmland would be perhaps better interpreted as a policy to create on-farm wetlands,” says Ian Mackenzie, Federated Farmers Environment spokesperson.

“After talking with the team at DairyNZ we’ve arrived at a very different conclusion to that other groups have come up with.

“Instead of looking at this as a linear purchase of land, or trying to recreate MAF’s old farm advisory division, think more along the lines of NIWA’s guidelines for constructed wetlands.

“A fund $10 million a year could purchase at least 286 hectares. Using NIWA guidelines and if turned into strategically located wetlands, DairyNZ and Federated Farmers believe it could remove 60-70 percent of Nitrogen from around 9,500 hectares of farmland. . .

 Sweet Success for Villa Maria at International Wine Show:

It was sweet success for Villa Maria last evening, collecting nine gold medals and the trophy for Champion Sweet Wine at the New Zealand International Wine Show, held at the Crowne Plaza Hotel in Auckland.

The New Zealand International Wine show is the country’s largest wine show, in its tenth year with over 2000 global entries, it gives recognition to wines that are or will be sold in New Zealand.

The world renowned show organised by Kingsley Wood of First Glass Wines of Auckland, has a panel of over twenty experts judging the high calibre of entrants, overseen by Chief Judge Bob Campbell, MW. . .

 


The sky isn’t falling

September 25, 2014

The cut in Fonterra’s payout isn’t good news but it isn’t the disaster that many are proclaiming.

Nor was the timing the political conspiracy that Winston Peters suspects:

Just four days after the General Election the true state of the dairy industry is revealed – returns for milk that the New Zealand economy is reliant on have slumped.

“Questions need to be asked by New Zealand voters on why they were not informed about this serious decline before Election Day,” says New Zealand First Leader, Rt Hon Winston Peters.

“The drop in payout is a $5 billion hit to the New Zealand economy and 2 per cent off nominal GDP.

“It appears the government and Fonterra joined forces to keep the facts hidden from voters? . . .

Fonterra makes announcements on its previous season’s final payout and any revision to the current one at this time every year.

The record final payout for last season was no surprise. Nor was the cut in this season’s forecast.

Anyone with even cursory knowledge of the global milk market was expecting it after successive drops in the GlobalDairyTrade price index and with the knowledge that the milk supply here and around the world was outstripping demand.

Lower income will impact on farmers, those who service and supply them and the wider economy but the news isn’t all bad.

The value of our dollar fell after Fonterra’s announcement which will help all exporters.

And while dairy prices are falling, demand and prices for sheep meat and beef are improving:

Rabobank New Zealand CEO Ben Russell said the softening in overall rural confidence was clearly a reflection of the impact of the bearish global dairy outlook and lower milk prices on dairy farmer sentiment.

“Falling dairy commodity prices are the overwhelming factor at play here. At the time of the survey being taken, the globalDairyTrade auction prices fell six per cent, taking them down 45 per cent from their February peak,” Mr Russell said.

“And with global dairy supplies continuing to increase from all key exporting regions, a significant price recovery is not imminent.

“That said though, farm commodity prices move in cycles and, clearly, dairy commodity prices are entering a lower part of the cycle right now. While this is always a difficult time, the important thing to remember is the medium to long-term picture for the dairy industry is strong.”

Mr Russell said dairy farmers were also cautious with the dairy industry approaching a critical time in the year, with the peak production and selling period for New Zealand milk just weeks away.

The dampened confidence among dairy farmers was reflected in their business performance expectations in the coming 12 months.

Dairy farmers had the most pessimistic outlook of their own farm business performance. However, Mr Russell said, it should be noted this was coming off record highs for business performance expectations among dairy producers over the past 12 months.

The latest survey found almost half of dairy farmers surveyed (47 per cent) expect the performance of their own farm business to worsen in the coming 12 months, up from 30 per cent with that expectation in the previous quarter. Just 20 per cent expect an improvement in performance, compared with 27 per cent previously. A total of 32 per cent expected performance to remain stable.

While there was also a tempering in sentiment among beef and sheep farmers, after reaching three-year record highs in the previous survey, confidence in this sector remained at overall strong levels.

Mr Russell said lamb prices were up on the previous season and beef prices were currently hitting record highs due to tight global supply.

In terms of expectations of their own businesses, the number of beef and sheep farmers expecting improved performance declined from 57 per cent last quarter to 48 per cent this survey. However, the percentage expecting their farm business performance to worsen remained stable, at just seven per cent. A total of 42 per cent anticipated business performance would remain at the same level.

Despite the decline in overall confidence, New Zealand farmers’ investment intentions were overall stable, the Rabobank survey showed.

Sheep and beef farmers increased their investment appetite – with 43 per cent indicating they intend to increase investment in their farm businesses over the next 12 months, up from 37 per cent previously. Only six per cent intended to decrease investment (compared with four per cent in the past quarter).

For dairy however, investment appetite had waned, with 21 per cent intending to invest less in their businesses (up from just seven per cent with that view in the previous survey) and 20 per cent expecting to increase investment (down from 27 per cent). This was the lowest level of dairy farmer investment intentions in more than five years (since August 2009).

Mr Russell said this change in sector investment dynamics may be an early indication the decline in the national sheep flock and the rate of dairy farm conversions were slowing. . .

Federated Farmers says farmers will be down but far from out:

Fonterra Cooperative Group farmer shareholders will welcome confirmation that the 2013/14 season has ended exactly as promised with a total payout of $8.50 per kilogram of milksolids (kg/MS).  That good news is balanced by a sharp revision downwards in the 2014/15 forecast.

“The 2014/15 season which offered so much has turned into a breakeven one for not just Fonterra suppliers but the entire industry,” says Andrew Hoggard, Federated Farmers Dairy chairperson.

“Like Synlait’s revision this week, there is a ‘good news and bad news’ dimension in this.   The good news is that we take the 2013/14 confirmed payout and the lowest revised forecast for 2014/15, we are talking an average total of $7kg/MS across the two seasons.

“A $5.30 kg/MS milkprice is also a lot higher than some commentators had expected if the forecast sticks.  If being a little word with a big meaning.

“Losing 70 cents kg/MS on the milkprice is really going to hurt.  Farmers will be kicking capital works into touch and will be pruning herds to rid themselves of any passengers.

“Speaking to DairyNZ, farm working expenses this season, before depreciation and interest payments, are expected to be around $4 kg/MS this season.  Feed, fertiliser as well as repairs and maintenance are going to be cut back.  We’ll only do what needs to be done.

“What we know from DairyNZ is that two-thirds of dairy farms have working expenses of between $3.25 and $4.75 kg/MS.  Of course when you start paying back the bank manager, the average cash costs on-farm head up to $5.40 kg/MS.

“As you can tell from what the forecast currently is, the current surplus is a wafer thin 15 to 25 cents kg/MS.  Expressed as retail milk, that’s about 1.25 to 2 cents a litre this season.

“It means that upwards of a quarter of our guys will be making a loss this season. 

“We also believe that unlike the Global Financial Crisis, dairy farmers have been listening and have focussed on building financial freeboard.  Sadly for some farmers, they’ll have to dip into that big time.

“Federated Farmers’ advice is to watch costs but to keep your bank, farm consultant, accountant and family fully in the loop.  Take a no surprises approach to get through.

“This season has been a perfect one for global milk with ideal conditions everywhere compounded by civil unrest in the Middle East and dislocation of European milk due to what is happening in Eastern Ukraine.

“We can only hope there is no more bad news but I am optimistic we may be back above $6 kg/MS for 2015/16,” Mr Hoggard concluded.

Agricultural prices are always cyclical.

Dairy farmers creamed it last season, now it’s sheep and beef farmers who have a brighter outlook. Both know that what goes up comes down and what comes down goes up again, sooner or later.


Rural round-up

September 24, 2014

Beef surges to record on US demand for hamburgers, outlook upbeat – Tina Morrison:

(BusinessDesk) – Prices for beef used in hamburger patties in the US are likely to hold at elevated levels after surging to a record in the past year as drought-ridden American farmers rebuild their herds, boding well for kiwi farmers, an analyst says.

The price for US imported 95CL bull beef, the raw ingredient for meat patties, has surged 59 percent to US$3.18 a pound in the past year, according to Agrifax data. In New Zealand dollar terms, the price is at $8.37 per kilogram, beating the previous record of $6.60/kg in 2001.

“It has just been rocketing up very sharply. It is well into record territory now,” said Nick Handley, senior sheep and beef analyst at Agrifax. “If prices can stay anywhere near these levels, it’s extremely positive for New Zealand because you expect a lot of that to flow through to New Zealand processors and New Zealand farmers.” . . .

Time right for large irrigation schemes:

Farming and irrigation lobby groups are eager for the new Government to change environmental rules and get large-scale irrigation schemes up and running.

Lobby groups Federated Farmers and Irrigation New Zealand say the time is right, with the National Party being re-elected by a handsome margin for the Resource Management Act to be reformed.

Irrigation New Zealand chief executive Andrew Curtis said today that proposals by Labour and the Green parties to tax water did not find favour with irrigators, and National’s resounding win on Saturday gives them more confidence.

Mr Curtis said Irrigation New Zealand wants to see changes to the RMA. . .

Farmers Disappointed with Milk Price Drop, Cautious Approach Required:

Fonterra Shareholders’ Council Chairman, Ian Brown said Farmers will be disappointed following the Co-operative’s latest drop in its 2014/15 forecast farmgate Milk Price to $5.30 per kg/MS.
The Co-op also announced an estimated dividend range of 25-35 cents per share.

Mr Brown: “Even though Farmers are aware of the prevailing market conditions and the effect they have on the price they receive for their milk the announcement will add to the challenges being faced on-farm.

“It is in these seasons that Farmers will want to receive the full benefit from the integrated supply chain that their Co-op provides. . .

Great Result for Farmers Following Challenging Year for Co-Op:

Fonterra Shareholders’ Council Chairman, Ian Brown said the 2013/14 season was one of real complexities for the Co-operative yet produced a great result for Farmers.

Mr Brown: “The farmgate Milk Price of $8.40 per kg/MS has come on the back of a season in which good production was supported by strong demand and high prices.”

“This will be very well received by Farmers.”

Mr Brown said it was important to recognise that the same factors which positively affected the farmgate Milk Price, such as the demand for milk powders, contributed to the challenges faced by the business in terms of profit as evidenced by the Earnings Before Interest and Tax (EBIT) figures. . .

 Couple give their farm to university – Jill Galloway:

It was a time for celebrating.

After 10 years, Bulls-Marton farm owners Jim and Diana Howard found they could work with Lincoln University and it had a deal with local iwi Ngati Apa.

It had not been for lack of trying to find a like-minded partner.

But now it has come together – a demonstration farm that local farmers can look over the fence at, and get good ideas, as well as a farm to train people in sheep and beef and cropping.

That was what the Howards wanted and they have given their farm to the Lincoln Westoe Trust. . .

Candidates for Fonterra Board of Directors’ Election Confirmed:

Candidates for the Fonterra Directors’ Election were announced by the Returning Officer, Warwick Lampp today following the completion of the Candidate Assessment Panel (CAP) process.

This year there are six candidates standing for the Board of Directors. They are Gray Baldwin, Leonie Guiney, David MacLeod, John Monaghan, Garry Reymer and Grant Rowan.

As in previous years, the CAP process was available to assess the capabilities, experience and qualifications of Director candidates and provide Fonterra shareholders with more information to help in making an informed vote. While the CAP process is open to all Director candidates, it is not compulsory. This year all candidates went through CAP. . .

 

Pahiatua Company Announced as New Zealand Innovators Awards Finalist:

Pahiatua company, DTexH2o, has been named as a finalist in the Innovation in Agriculture & Environment category of the prestigious New Zealand Innovators Awards.

The company’s innovative product, DTexH2o, is an in-line electronic probe that detects the difference between milk and water in the cowshed milk line.

Founders of the company, Graeme and Alison Franklin, said the DTexH2o uses an alarm to stop farmers spilling milk down the drain or getting water in the milk vat during wash-down.

“When a farmer washes-up the milk line, water is pumped through the pipes, pushing the last milk through into the vat. The farmer must manually turn the valve to re-route the water to stop it going in the vat,” Alison said. . .

New Chairman Excited by Gimblett Gravels Opportunities:

Less than a week into his role, new Gimblett Gravels Winegrowers Association (GGWA) Chairman, Gordon Russell, is already working on plans for GIMBLETT GRAVELS future success.

Esk Valley’s Senior Winemaker, Gordon says, “I am honoured to become Chairman of this talented group of growers and wine producers. I would like to carry on the work of outgoing Chairman, Tony Bish of Sacred Hill, whose strategic direction and dedication over the last two years has significantly raised the profile of GIMBLETT GRAVELS wines, both in New Zealand and on the international stage. . .


Rural round-up

September 19, 2014

Farmers have spent millions in the Horizons region:

A Federated Farmers survey has revealed the average dairy farmer in the Horizons Region has spent over $110,000 on environmental management in the past five years.

“There are huge numbers being invested in the region, which tells a really positive story about where we are heading environmentally and the buy in that is coming from the farmers,” says James Stewart, Federated Farmers Manawatu-Rangitikei provincial president.

“As people vote tomorrow I genuinely hope they will realise that farmers are doing a lot to farm more sustainably.

“It is very difficult to put a number on environmental spending, but we wanted to try, so we sent a survey out to all 918 dairy farms via the Horizons Regional Council. We were stunned by the response, not just the figures but how many people replied during their busiest time of year, calving season. . .

 

Working group focused on clear advice:

The industry-led working group looking at the issues with swedes affecting dairy cattle in Southland says a key priority will be developing clear and agreed advice for farmers.

The group met for the first time this week, with DairyNZ’s Southland regional leader, Richard Kyte, chairing the meeting. The group includes representatives from Southland veterinary practices, Federated Farmers, Beef+Lamb NZ and PGG Wrightson Seeds. It also has specialist advisors on veterinary pathology and plant science.

“Evidence and science-based information is crucial and will be the focus of this group. Gathering this information is a work in progress and will involve all parties,” says Richard. . .

Dairying business woman takes top role:

Delwyn Knight has taken the role of general manager of Liberty Genetics where she is leading a team that’s making headway in the competitive dairy genetics market.

Although modest about landing the top job, Knight admits that she is one of very few women working in top dairy genetics roles, and she is excited about taking on the position.

“It’s great to be in a position where I can provide value and support to farmers when they are making important farming business decisions,” said Knight.

“I’m really looking forward to working directly with our farming clients, understanding what their needs are and supporting them to get the best results for their herds.” . . .

Robotic sheepdogs unlikely Kiwi farmers say:

At the risk of being out of step with technology, Federated Farmers is dubious robotic sheepdogs will replace the real thing anytime soon.  Reported late last month, European academics believe they have created an algorithm simulating sheepdog behaviour.

“I am not saying it won’t come to pass but it’ll be more like one farmer robot and its droid than dog trials being replaced by droid trials,” says Rick Powdrell, Federated Farmers Meat & Fibre spokesperson.

“Anyone who works with dogs and sheep knows there’s more to this than an algorithm.

“For starters, there is a primordial instinctive connection between the two animals.  How you simulate that I have no idea. . .

Landcorp completes  full purchase of Focus Genetics:

Landcorp Farming Ltd. is now sole owner of livestock genetics business, Focus Genetics. The announcement comes after Landcorp successfully acquired the remaining 33% shareholding from
Rissington Breedline.

Hawkes Bay based Focus Genetics is New Zealand’s largest red meat genetics business with 17 breeding partners throughout New Zealand.  Formed in 2011, Focus Genetics has since grown its
market share, serving more than 750 commercial farm operations. 

Last year the company sold over 4,000 rams, 800 bulls and 400 stags to farmers in New Zealand and overseas.
Gavin Foulsham, Focus Genetics CEO, said having one owner provided certainty for the company’s plans to invest more towards achieving greater rates of genetic improvement. 

It also means Focus could explore more sales opportunities offshore. . .

I want to eat a weka - Offsetting Behaviour:

It’s been more than five years since I first posted on Roger Beattie’s felicitous “Eat them to save them” campaign. And I still am not allowed to buy a weka for dinner.

Roger is one of New Zealand’s great enviropreneurs: the National Farming Review called him an Eco Anarchist. He loves the environment and sees the best way of saving it as ensuring that it’s profitable to save it. Weka are endangered, but they’re easily farmed and tasty. Why aren’t we raising them for the restaurant trade and conserving an endangered species in the process? The Department of Conservation says no. They say no incredibly incoherently. But their “No” is what matters. . .

Two gold medals for Goldie Wines:

Goldie Wines on Waiheke Island has won its first gold medals for new owners, University of Auckland and winemaker, Heinrich Storm.

Two Goldie Syrah wines from the 2013 vintage took two of the eight gold medals awarded in the Syrah category at the recent NZ International Wine Show.

The Goldie Syrah 2013 and Goldie Reserve Syrah 2013 were awarded gold in what Heinrich says is a significant achievement for the new operation.

“These medals are the first won since the University took over ownership of the vineyard in 2011 from Goldwater Wines,” he says. “Also for me it is significant, because they are my first as winemaker for Goldie Wines.” .  . .


Rural round-up

September 18, 2014

The most boring bankrupt economic argument–“we export raw logs when we could be adding value and making jobs” : Eye to the Long Run:

The rot set in in the late 1940s on this. Jim Anderton was maybe the first in the modern era to believe we wantonly refused to profit from the blindingly obvious money and jobs to be had from processing timber.

In recent times only Winston Peters has been bright enough to see what the entire business sector has apparently completely missed.

Now, joining him as a value add timber processing expert we have the lawyer from Herne Bay – Mr Cunliffe who has spotted the opportunity.

It is, you understand, not so profitable that any of them would give up their day job… it never is, is it? . . .

Future of red meat promotion under threat – Allan Barber:

Next year’s Commodity Levy Act referendum is one of the factors concentrating meat industry minds on the question of red meat promotional investment. B+LNZ is currently conducting a consultation round with individual meat companies to find out how this critically important, if contentious, topic should be agreed for the benefit of all industry participants.

B+LNZ Chief Executive Scott Champion told me it’s too early to make any predictions about the outcome, at least until after completion of the consultation round at the end of September. With the referendum about 12 months away, the process is geared to providing time to gather enough detail for promotional strategy development before taking this out to farmers to test it in advance of the vote. . . 

New Zealand’s Hake and Ling Join Top 8% of World’s Sustainable Fisheries:

Hake and ling from New Zealand are now among the top 8% of global sustainable fish species after being recognised by the Marine Stewardship Council (MSC).

Each of the three New Zealand hake trawl fisheries, five ling trawl fisheries and five ling long line fisheries have been certified as sustainable against the MSC standard – the ‘gold standard’ for sustainable seafood production.

Only 8% of the world’s wild-capture harvest is certified through the global MSC programme which sets high internationally-accepted standards for sustainable fishing and provides consumers with assurance that MSC certified seafood is sustainable, based on sound, independent science. . .

 

Rural New Zealand wants gigabit equality:

Federated Farmers and TUANZ believe it is essential the next Government delivers better connectivity to rural New Zealand, and is keen to work with them to make that happen.

“We are encouraged by the National Party’s further commitment of $150million, if they’re re-elected, and hope to see a similar commitment from our next Government announced this Saturday” says Anders Crofoot, Federated Farmers Telecommunications Spokesperson.

“Federated Farmers and TUANZ support a Gigabit Agenda for Rural New Zealand that doesn’t leave our productive sector behind. We need to talk about gigabit speeds, where farmers can eventually get their gigabytes as fast as the townies do. . . .

 The right people trained the right way -  Craig Littin:

Our recently released Manifesto talks about building a sustainable farm system giving us the collective means to go forward as a nation.  We can and we will be more than we are today, but to do that we need the right people trained the right way.

Firstly we need to look at what we are trying to achieve. We need to have the young people of New Zealand believing that farming is the attractive career option that it is. We also need to put our money where our mouth is in terms of investing in education, science, research and innovation.

There are some great stories out there of the highly skilled people in our industry who have worked through the agricultural industry to now run multimillion dollar businesses, on very attractive salaries. These opportunities are available to anyone with the enthusiasm, intellect and discipline required to make it in the dairy industry, but we need sound education systems to get the right people into the industry. To do this we need to align the requirements and standards to fulfil job roles with the qualifications offered within primary industry training/education institutes. . . .

Molkerei Ammerland Completes First Sweet Whey Powder Auction on Globaldairytrade:

Sweet whey powder has been sold for the first time on GlobalDairyTrade (GDT), the world’s leading online dairy auction platform, with Molkerei Ammerland selling the product they offered at their first trading event.

Molkerei Ammerland CEO Ralf Hinrichs said the company was pleased with the results from the first SWP online auction.

“Through GDT we have been able to extend our reach to a larger number of customers, and to transact with them much faster. We’re looking forward to using GDT to grow our export market,” he said. . .

Tasman Tanks Appoints Craig Hemmings as Dairy Effluent Sector Manager:

Leading New Zealand and Australian storage tank company Tasman Tanks, has appointed Craig Hemmings as dairy effluent sector manager.

Mr Hemmings brings to his position more than a decade of management experience with nationally and internationally recognised agricultural companies.

As dairy effluent sector manager for Tasman Tanks, Mr Hemmings will oversee the operational management of the company’s dairy effluent division in New Zealand.

“From small beginnings in 1996, Tasman Tanks has built its reputation on designing, manufacturing and installing fully engineered and certified tanks,” said Mr Hemmings. . .

 Central Otago Wine Industry no longer a “One Trick Pony”:

As we have come to expect, Central Otago wines dominated the medals for pinot noir at the 2014 New Zealand International Wine Show, taking out 10 of the 15 Gold Medals awarded. But what is more interesting about the results of this show is that Central Otago wines won medals in a total of 10 different wine categories – Methode Traditionelle, Riesling, Sauvignon Blanc, Pinot Gris, Gewürztraminer, Chardonnay, Dessert Wine, Rose, Pinot Noir, and Syrah.

Now in its tenth year, The New Zealand International Wine Show is firmly established as the largest wine competition held in New Zealand each year. The 2014 New Zealand International Wine Show was judged from 8th to 10th September in Auckland and attracted a total of 2130 entries. Trophies will be awarded at the Awards Dinner on 27 September. . .


Why we need 90 day trial

September 18, 2014

This example of an unscrupulous worker highlights why we need 90 day trial periods:

Federated Farmers believes the experience of a husband and wife farming team in Taranaki underscores why the 90-days provision is so important to small businesses.

“Yesterday a member called 0800 FARMING to alert us to a guy doing the rounds in Taranaki who may be gaming employment laws,” says Andrew Hoggard, Federated Farmers Employment spokesperson.

“He appeared to be a keen farmworker but became insistent that all he needed to start was a handshake. This guy even told the couple concerned that he could see they were under pressure so even offered to pitch his tent.

“They did exactly the right thing by getting him to sign Federated Farmers’ industry standard employment contract before starting. That’s where the bush lawyer emerged as he tried to get clauses modified.

“Lucky for them they stuck to their guns and to Federated Farmers agreement and advice. As it turns it wasn’t a long employment relationship lasting a mere 4.5 days.

“On the very first day there was a major argument over helmet use where he refused to wear one. He turned up to work another day wearing a balaclava asking if, “it intimidated them.”

“Along with a generally unhelpful demeanour it appeared to our member that he was trying to bait them into a summary dismissal.

“They called Federated Farmers 0800 327 646 advice line and followed that advice to the letter dismissing the person under the 90-days provision. His parting shot was “it’s going to cost you.”

“It shouldn’t because they stuck to the law and to Federated Farmers’ advice and contract. No matter how small or short term the role is, never “shake on it” or allow a person to start work before they have signed their employment contract.

“What concerns us is that there are bush lawyers out there who could be looking to game employment laws in order to secure a settlement from unwitting farm employers. Our member wanted this publicised to prevent other farmers from being caught out.

“It is why the 90-days provision is so important and why it would become a feeding frenzy for such people if it were to be axed.

“The 90-days provision is a crucial protection for employers to prevent them from being stuck with unscrupulous workers. Our member told us their last employee only left after four years in order to go sharemilking.

“They were fine because they had systems in place backed up by Federated Farmers’ employment contracts and member advice. If you haven’t got your systems together you seriously risk an employment law shellacking,” Mr Hoggard warned.

Labour and the unions always promote the worker as the weaker one in the employer-employee relationship.

But it is very difficult to get rid of a worker who isn’t working out and it’s not just the business that suffers as a result of that, it’s other staff when the dud worker poisons the workplace.

 


NZIER: water taxes will suck Otago & Canterbury dry

September 18, 2014

Water taxes could become a regional tax on Canterbury and Otago, seriously impacting those regional economies.

This is the conclusion of a New Zealand Institute of Economic Research (NZIER) report for Federated Farmers.

Care needs  to  be  taken  when  considering  taxing  competitive  agricultural  sectors since  countries  which  have  done  so  without  strong  justification  have  performed poorly (e.g. Argentina).

While there is little policy relevant data to tell us how much water is being used by the rural sector, preliminary estimates suggest that for every cent (per cubic metre of water) the rural sector is charged, $39 million will be taken out of rural communities.

This assumes  that  the  policy  is  enforceable  and  that  any  exceptions  could  be adequately  accommodated.1

Further, if  focused  on  irrigation  only,  the  tax  will predominantly fall on Canterbury and Otago  water users  (see following table), while traditional dairying areas such as Taranaki and Waikato will pay a minimal water tax.

While water  quality  is  reasonably  good,  maintaining  water  quality  is  a  major challenge that needs  to be overcome  with the  spotlight firmly on non-point  source agricultural run-off. Farmers need to be proactive in addressing this issue or others (e.g.  over-zealous  regulators, foreign consumers)  will do so  instead, possibly in ways that are less efficient for farmers and the country than an industry-driven initiative.

Doing nothing about water quality  is  not a sensible  option.  Neither is rushing ahead without sufficient information.  

But this is not a new problem. New Zealand can learn from other countries’ water quality regulatory experiences here and hopefully avoid making their mistakes. Some key lessons are:

  •  Addressing water quality that impacts on agriculture is a long term game. Rash decisions made now could have significant and costly unintended consequences
  •  Use science to determine minimum flows to sustain healthy water ways, and be flexible and adaptive in the management of the environment as scientific knowledge improves
  •  Using markets to allocate water between competing uses can be efficient and effective when conditions allow, but be aware that market forces alone will not solve all problems
  •  Water taxes will not be an effective allocation mechanism if significant physical, regulatory or information barriers exist. Specifically, further work is required in understanding the detailed water use trade-offs since we lack the necessary policy-relevant information, data and institutional capability
  •  Where possible, including urban areas within the same water allocation and trading framework will improve efficiency. . . .

It compares the policies of the National, Labour and Green parties and says:

There certainly  needs  to  be  a  step  up  in  primary  sector  –  and  other  sectors’  – responsiveness to this issue. But durable, effective water  trading  solutions take time to develop and must be based on robust analysis and facts, not rhetoric and ideology.

Voters should  be  wary  about  promised  policy  outcomes  when  the  evidence  base around  the  economic,  environmental,  social  and  cultural  impacts  of  the  proposed policies is far from complete. . .

There are no credible arguments against the importance of good water quality, the need to prevent degradation of water ways and clean up the dirty ones.

But imposing a water tax on Canterbury and Otago farmers to address problems all over the country, some of which have nothing to do with irrigation or farming, is not the answer to poor water quality in some areas and will create other problems.

It will also impose huge costs on a relatively small number of farmers in two regions:

“Let’s not kid ourselves that the road Labour and the Greens are travelling down with Water Taxes, looks more like regional farming taxes to us,” says Ian Mackenzie, Federated Farmers Environment spokesperson.

“The NZIER have calculated that a water tax of one cent on every cubic metre (m3) of water used for irrigated and stock purposes, means $39 million would need to be paid by farmers. 

“While Labour and the Green Party won’t confirm what they are considering, in 2011, the Greens campaigned on ten cents a cubic metre.

“If that happened then Canterbury’s farmers would foot 62 percent of the cost ($248 million) while 21 percent of the cost would fall on Otago’s farmers ($82 million).  Those two regions being where most of New Zealand’s irrigation happens.

“This represents something like a 13 percent bite out of agricultural GDP in Canterbury and 12.5 percent out of Otago’s agricultural GDP.  That’s one heck of a wallop and for what?

“These taxes have little to do with the political rhetoric of tackling water quality. There are plenty of regions with little or no irrigation, which have water quality challenges due to agriculture, industry and municipal influences.  

“It seems more about revenue generation to plug big spending promises and farmers, horticulturalists and vintners in Otago and Canterbury are being lined up to foot the bill.

“There’s no mention that these same businesses already pay thousands of dollars each year in ‘taxes’ to regional and district councils for the privilege  of accessing water.

“It doesn’t take a rocket scientist to work out that water taxes will only drive up the cost of food production, especially locally grown fresh vegetables and fruit.

“Are Kiwis really prepared to gift our domestic food market to other countries by pricing ourselves off the market?

“Labour and the Greens claim it will drive better and more efficient use of water. Well they are too late. Over the past ten years or so, farmers have been spending hundreds of millions of dollars upgrading on and off-farm irrigation infrastructure to more efficiently use water.

“This is plainly obvious for all to see in Canterbury with the proliferation of centre pivot irrigators.  With each one costing some $250,000, they allow the farmer to use substantially less water producing more food and fibre over traditional border dykes.

“There’s only so much money to go around for farmers to invest.  These proposed tastes will only slow down or stop a farmers’ ability to invest in new technologies.

“You’ve got to remember that we’re only using a fraction of New Zealand’s renewable freshwater resource, but the proper word is renewing.

“As the NZIER also notes, there are large informational, institutional and implementation gaps on water taxes. In our view, water tax proposals should have ‘use with caution’ in flashing red lights.

“If you want an example of a country with ill-founded and ill-thought out taxes that are like a wrecking ball through the primary industries then Argentina provides it.  Dr William Rolleston visited it earlier this year and saw for himself how everyone loses out there.

“By attacking Canterbury and Otago irrigators, there is such a dislocation between who you tax and the problem you want to solve, that the only thing you hurt is the economy.

“That’s why the media, politicians and commentators need to heed NZIER’s advice that, “care needs to be taken when considering taxing competitive agricultural sectors since countries which have done so without strong justification have performed poorly”.

“With some trading partners increasingly believing we are not responsibly harnessing our water resources to guarantee production, this is no place for policy experiments,” Mr Mackenzie finished by saying.

We don’t need an expensive experiment the direct costs of which will be carried by a relatively small number of farmers and the indirect costs of which will impact on Otago and Canterbury.

We need more of what’s already working.

This includes independently audited environmental plans for farms, which is what the North Otago Irrigation Company requires of all its water users.

Farmers already had lots of reasons to vote for another National-led government. This report provides them with more.


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